A Defense of Free Market Environmentalism

On July 30, the Washington Post published my letter to the editor where I argued for the privatization of America’s national parks. In response to an earlier op-ed (which claimed the National Park Service was a “prime example of government failure”), I wrote that the best way to solve government failure is through privatization. The national parks would be better managed if they were in the hands of private, environmental nonprofits. In short, I was arguing for free market environmentalism.

As one can imagine, privatization did not go down well with the Washington Post’s liberal readers. Online, my letter was swarmed with angry comments. My proposal was blasted as a “horribly misguided…propaganda piece.” I was called a “moron” and accused of “trying to destroy this country for a quick buck.” One commenter even said I should go kill myself. In fact, another said I would “sell [my] grandma if it made a profit.”

Since a letter to the editor is too short to fully promote free market environmentalism, I will now rebut some of the more misinformed claims about privatizing the parks.

Private parks would not lead to price gouging

One common concern was that if the parks were privatized, the owners would gouge the visitors and charge incredibly high entrance fees. The simplest response is that if a greedy park owner did charge something outrageously high (say, $200 per ticket) who would attend? To attract more visitors, private parks would have incentives to charge a reasonable price, in order to increase profit. In addition, since the government would no longer have a monopoly, parks would compete with each other to attract visitors, thereby driving entrance fees down.

Now, some might counter that this proposal cannot work with all parks. Whoever owns all of the Grand Canyon has a monopoly, and so, they can price gouge to their heart’s content. But why should all of the Grand Canyon go to just one buyer? To further increase competition, parks that have truly unique features could be divided into smaller pieces and purchased by different organizations. After all, places like Yosemite, Yellowstone, and the Grand Canyon are immense.

In addition, what many people don’t realize is that there ain’t no such thing as a free lunch. While the parks do have nominal fees, most of their cost is hidden to visitors. Visitors already pay for the parks through concessions, lodging, parking permits, and taxes.

The parks are safer in private hands than in the government’s

In the Washington Post, I specifically mentioned that the parks should be “managed by environmentalists in the private sector.” Putting aside their politics, nonprofits like the Sierra Club and the Nature Conservancy have great records in conservation. In addition, one liberty-minded commenter commended the Land Trust Alliance for its “successful history of land management.” But despite this clear and explicit praise, I was still called a “right-wing anti-environment hack.”

However, there are other options to ensure private conservation. Environmental nonprofits need not be the only option. The Department of the Interior (which oversees the National Park Service) could also sell the parks as conservation easements. These agreements allow land to be managed privately, but with legally binding agreements to limit development. This would assure Americans that the parks would still be preserved, regardless of their owner.

In addition, what these anti-privatization advocates fail to realize is that the government does not always promote an environmentalist agenda. Since the parks would no longer depend on federal funding, there would be no need to aggressively lobby Congress or worry about election cycles. Indeed, none of these commenters rebutted my concerns about regulatory capture (when a regulatory agency becomes dominated by special interests) or political patronage. For example, under President Reagan, Secretary of the Interior James Watt quintupled leasing federal land to coalmining and regularly mocked environmentalists. Indeed, he once quipped there are two groups living in the United States: “liberals and Americans.” Remember, Watt was once the ultimate overseer of the National Park Service.

Furthermore, the Sea Lion Caves on the Oregon coast exemplify how private conservation can rectify a government failure. In 1920, the Oregon Legislature established a bounty to exterminate populations of seals and sea lions on the Oregon Coast. Each sea lion slaughtered earned a $5 reward, up to an annual limit of $10,000 a year. By comparison, these bounty hunters would have earned over $120,000 a year in 2010 dollars, thanks to these perverse government incentives.

Fortunately for the sea lions, the market stepped in to correct this egregious government failure. In 1927, R.E. Clanton purchased America’s largest sea cave and drove away bounty hunters from his property. Five years later, Clanton opened a for-profit business to attract visitors. Since then, the Sea Lion Caves have been both profitable and protective of the environment. Each year, over 200,000 people visit, while the sea lion population on the Oregon coast has quadrupled since 1964. Indeed, profit and stewardship are interdependent. At the Sea Lion Caves:

…their profitability depends on the presence of the animals. The owners take every precaution against disrupting the natural habitat. Thus, tourists are fenced out at a distance close enough for viewing, while the animals are free to come and go, unlike in an aquarium or zoo. Further, maintenance and improvements are undertaken only when the wildlife will not be disturbed….The Sea Lion Caves demonstrate that making a living and preserving wildlife can be compatible.

Disney has a great model

On that note, free market environmentalism is regularly accused of turning the parks into Disneyworld (or worse, Chuck E Cheese). My response: We should be so lucky.

Some might argue that this is not a fair comparison to privatizing the parks, since Disney’s Animal Kingdom is not conserving land. In fact, it’s even better than conservation. Before this park was developed, the land in Lake Buena Vista, Florida was vacant and not a source of anything valuable to environmentalists. But because of Disney’s efforts, that land is now home to over 200 different species and 1,000 animals from around the world, including a replicated African savannah. In other words, Disney has generated both economic and environmental value. Not bad for a multibillion dollar media conglomerate.

Privatization is a continuum

While full privatization may be ideal, there are other options to inject market forces into public lands. In Oregon, Timberline Lodge is a phenomenal example of this partial privatization.

Nestled on the slopes of Mount Hood, Timberline Lodge was built as a public works project during the Great Depression. In fact, President Franklin D. Roosevelt personally dedicated the lodge in 1937. However, due to repeated mismanagement by the government, the lodge was forced to close in 1955—barely 18 years of operation. But soon after it closed, Richard Kohnstamm made a bid to operate the lodge. Starting in 1955, Timberline Lodge was run as a public-private partnership: the U.S. Forest Service would administrate and own the property, but contract out the day-to-day operations to the Kohnstamm family.

This market infused partnership became immensely successful. The lodge now receives almost 2 million visitors each year and became the first ski resort to be honored as a National Historic Landmark. But without the efforts of Richard Kohnstamm, Timberline Lodge would have remained derelict.

Privatization would not lead to advertisements everywhere

Whoever runs the parks has a strong incentive not to turn Yosemite or Crater Lake into Times Square. One major reason why people visit natural parks is to “escape” from modern life and reconnect with nature. Visitors greatly value nature and would eagerly pay a premium for that experience. Thus, accepting advertisements would “devalue” the experience of being in nature (permit the economic language). In addition, the ad revenue hardly would compensate for the loss of experiencing nature. Private owners have a formidable incentive not to plaster ads over their land.

Even if an evil, nasty transnational corporation did plaster ads all over one of its parks, no one is forced to enter. In a free market system, there would be other, ad-free parks to visit. In addition, people could boycott that park and force that corporation to change its ways and respond to consumer demand.

We don’t have money

Many have argued that instead of privatizing the parks, we should increase spending on the national parks. However, this solution is not as simple as it sounds. The U.S. national debt is over $14,000,000,000,000. In the debt ceiling agreement just reached between President Obama and Congress, roughly $2.4 trillion in federal spending is supposed to be cut in just the next decade. It is unlikely that national parks will compete successfully with much more powerful political interests defending expensive programs such as entitlements and national defense.

All in all, privatizing the parks is not ivory tower speculation. Disney’s Animal Kingdom, the Sea Lion Caves, and the Timberline Lodge are all living proof that free markets can promote and protect the environment.

Nick Sibilla is a research associate at Cascade. He received his bachelor’s degree in Political Science and Religious Studies from the University of Pittsburgh.

11 Responses to A Defense of Free Market Environmentalism

Sadly, however, none of the examples you cite seek to conserve the land in a natural state — they are all artificial creations. Even the Sea Lion Caves promote only one species to the exclusion of all others. Parks are not zoos and should never be treated as such. They are living ecosystems. Managing them for profit would ensure that paying customers are the priority — not the land, and certainly not the animals and plants that make up the ecosystem. Unless you can explain to me how the components that make up the park get a seat on the board of the company running it for profit, you will never convince this otherwise market-loving person that this is anything other than Randian hackery.

Did you really write that “there would be other, ad free parks to visit”? And would those other “ad free parks” contain Crater Lake, the Redwoods, Half Dome or the Grand Canyon? There is no other Crater Lake, so if I want to visit Crater Lake I need to go where Crater Lake is, right? And if there are ads all over the side of the lake that’s what I’m stuck with, right…Crater Lake surrounded by ads. I can’t just pop down the road and see Crater Lake at some other park. Privatization of our national parks is a terrible idea, and your argument to the contrary needs work.

“Privatization of our national parks is a terrible idea, and your argument to the contrary needs work.”

What is your solution? Violently take over land by the government, and force the taxpayer to pay for it? Go endlessly into debt and bankrupt the country, all on the backs of the productive? Violence is the answer to land conservation?

Do we just preserve enough parks for people to visit, or is there something more important about wildlife conservation that the demand for human recreation just won’t cover? The latter implies that in this case that the free-market would lead to a market failure and government intervention might be a solution to such a failure.

If you care so much about wildlife conservation, why not make one of your own? That is the great thing about a free market and a free society–you can take over land you want managed in the way you want it. You don’t need to lobby Congress and use money taken from the taxpayer by force to fund your idea.

A great example of “market” infused partnership. The State of California was going to shut down Grist Mill, and volunteers took it over and ran it. They are totally self-sufficient–the state just lets them stay there for free, but managing the park is up to the volunteers.

The volunteers sell flour they grind at the mill not only to visitors, but to local restaurants as well.

Would it be within the free-market environmental framework to still keep these parks as federal or state owned lands, but have them run by for-profits or non-profits? I think a private-public partnership would be the most reasonable idea that I could see actually passing through Congress.

Another aspect in favor of FME is that if you uphold property rights, then pollution or other damage done to those areas would have to be compensated. If it’s still public land, therefore technically owned by the taxpayers, couldn’t those property rights still be upheld, and those who cause damage have to compensate? We could put that money into a fund, very restricted in use, such as to fix the damages or do other repairs. I personally don’t see why they have to necessarily be privatized to uphold property rights.

First off you’re not talking about real privatization right? You already setting a limitation that you suppose will stand true and be stable. Putting the hands of our treasures in Non-profits? There’s wisdom in that is can see. But in reality, non-profits can come and go and they do. They are highly unstable and can have agenda changes. It’s the concept of PUBLIC LANDS that needs to be cherished. There’s nothing wrong with the concept of Public Lands just in the execution of it. As a former employee of a NP, State Parks, and National Forests, I can speak with authority that many of the problems facing our public lands are coming from the the Far Right. Ever since the concept of public lands came into being there have been groups looking to sell off ‘our’ land. The current method of cutting USFS budgets for example, has left the agency with a lack of resources to manage efficiently. I believe that this is basically an attack on public lands from a back door. If you can point to how ‘lame’ the F.S is doing then you can justify putting lands into private corporations and non-profits. The F.S has already outsourced camp ground management to companies along with using contractors to accomplish many jobs. The results of course are mixed. Wether the F.S actually saves money by this process is up for argument.

If we lose our public lands we could be taking away an important democratic process no matter if it has worked or not. We’re talking about reinventing the wheel. The Park Service, Forest Service and the other agencies have some major differences in how they work and how effectively they work but as much as I like aspects of groups like the Sierra Club and others ..those groups can have ecological and political agendas that can conflict with the mandate of public lands management. In reality, as long as the system is dominated by the current ‘free’ market, management of our public lands have reflected the attitude of those in power. It takes awhile for the ship to turn but when it does it’s pretty hard to stop where it’s going. National Parks and Forest Lands can be ‘managed’ from healthy long term ecological perspectives that benefit the public. Addressed from a scientific and unbiased aspect we can do well. Besides, why don’t we just consider that our current economic system which doesn’t even allow for ‘free’ markets to really exist. Our market is neither ‘free’ or ‘fair’ with corporate welfare, exorbitant tax breaks and other perks from being part of the oligarchy. Companies like Disney have had more then their fair share of labor issues and to think that turning our parks into Disney lands fit’s with the NP mandate makes me laugh. The market is about profit before social and environmental justice. Why do you think that we currently have the problems with global warming, species extinction, ocean acidification and other issues? If you think current market economics applied towards managing publics lands will work…then your sadly mistaken. If you think that groups like the Sierra Club will do a great job on public lands then you have little knowledge of the Sierra Club…heck I’ve even worked for them too.

Our current system of managing public lands has issues and problems that could take books to discuss BUT replacing a system that I argue still works with a system that we know will create a whole new set of problems is NOT the answer. Remember, Bush wanted to privatize Social Security in the hands of the ‘experts’ on finances. We all know how that would have planned out… They used the same arguments that I’m hearing from this group. Nick you may mean well but forget it…your ideas will hopefully never win out because if they do then not only will we be ‘paying’ extra money to these groups but we’ll be fighting them and a tilted playing field to fix the wrongs that they’ll end up doing. Just ask companies like Monsanto, Dupont and BP how well that works against them.